Preventing Racial Steering Begins With Real Estate Agents

Racially segregated neighborhoods date back to the beginning of American history. They’re also the result of biased zoning laws from the 1920s and 1930s as well as the urban renewal policies of the 1940s and 1950s. It wasn’t until the Civil Rights Movement and the Fair Housing Act of 1968 that the U.S. began to change its approach to community development.

But while laws changed, the demographics of many neighborhoods stayed the same. There are many sociological theories and federal policies that explain, in part, why this happened. One illegal behavior lies at the core: racial steering.

What is Racial Steering?

Racial steering is defined as:

“The practice of influencing a buyer’s choice of communities based upon race, which is one of the seven protected characteristics under the Fair Housing Act of 1968.”

Examples of racial steering include any of the below based on a person’s race:

• Suggesting or pushing clients toward a specific neighborhood

• Failing to provide vital information and details about a home

• Selectively showing properties only in certain areas

• Suggesting properties in certain areas as “better” or “more desirable” for specific racial groups

While there are many laws and Supreme Court decisions supporting the abolition of racial steering, it remains a systemic issue plaguing many real estate transactions each year. In fact:

• In 2019, an investigative crew went undercover in Long Island and discovered widespread racial steering practices occurring in the Empire State.

• From 2003 to 2007, the National Fair Housing Alliance (NFHA) conducted a multi-year, 12-city investigation from 2003 to 2007 and found an 87% rate of racial steering practices

• According to NFHA’s 2024 Fair Housing Trends Report, the second most reported type of housing discrimination in 2023 was based on race, with 5,820 complaints (17.04% of a total 34,150 complaints).

With laws in place to prevent racial steering, it's up to skilled, knowledgeable, and compliant real estate agents to prevent this behavior and speak up when it occurs.

When Was Racial Steering Made Illegal?

The Fair Housing Act of 1968 prohibits discrimination in housing based on a person’s race, color, religion, national origin, sex, familial status, and disability. Specifically, this pertains to the sale, rental, and financing of dwellings as well as other housing-related transactions. The Fair Housing Act also requires that all federal programs relating to housing and urban development be administered in a manner that affirmatively furthers fair housing.

President Lyndon B. Johnson signed the Fair Housing Act into law in the days following the riots and civil unrest that occurred after Rev. Dr. Martin Luther King Jr.’s assassination in April 1968. The Act was crucial for increasing federal funding and limiting hate crimes. Along with prohibiting housing discrimination based on protected classes, the Act prohibited racial steering.

However, due to sociopolitical and cultural reasons, there was a need for several more laws and Supreme Court hearings regarding the expulsion of racial steering practices in real estate.

How Can Real Estate Agents Stop Racial Steering?

There are many ways to stop racial steering practices as a real estate agent, and you’ll learn about them when you complete real estate Pre-Licensing education. Using common sense and acting upon human decency is the first step. Here are some other ways real estate agents (like you!) can help eliminate racial steering from the real estate industry.

Treat Everyone With Decency and Respect

A good rule of thumb when creating a hospitable and fair environment for clients is to approach everyone the same. We’re all human and should be treated with the same rights and respect regardless of the color of our skin.

Find Homes Based on Wants and Needs

When helping a client find a home, show them homes that meet what they want and need. By simply touring homes in neighborhoods with people of the same background or skin tone as your clients, you are not acting in their best interests.

Stay Informed About Fair Housing Laws

The CE Shop’s Continuing Education courses — which now include your state’s 2-Hr. Fair Housing Course required every three years by the National Association of REALTORS® (NAR) — will help you become more knowledgeable about preventing racial steering practices.

Practice What You Preach

Talk is cheap. Only you, the real estate agent, can follow these ethical guidelines and support your clients fairly and impartially. By practicing what you preach, you set an important precedent for your colleagues and future agents.

If You See Something, Say Something

If you see or know a fellow colleague is engaging in racial steering, you have an ethical obligation to report their behavior. By reporting their malicious actions, you can help bridge the gap for equality in real estate.

Additional Learning Resources

• Steer Clear of “Steering” - NAR

• ‘Steering’ in Real Estate (and What To Do About It) - Framework

• Racial Steering: Definitions and Examples – HelpfulProfessor.com

Complete NAR Fair Housing Training With The CE Shop

Did You Know? REALTORS® are required to complete two hours of approved Fair Housing training every three years? The current three-year cycle runs January 1, 2025 through December 31, 2027 and coincides with your required NAR Code of Ethics Training. Find and enroll in your state’s NAR-Approved Fair Housing Course when you browse our award-winning Continuing Education courses. Remember, The CE Shop is your one-stop shop for all of your real estate education needs!

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